GRUPO ENERGÍA DE BOGOTA First Quarter 2014 Results
May 14th, 2014
Disclaimer
The information provided herein is for informational and illustrative purposes
only and is not, and does not seek to be, a source of legal or financial advice
on any subject. This information does not constitute an offer of any sort and is
subject to change without notice.
EEB expressly disclaims any responsibility for actions taken or not taken based
on this information. EEB does not accept any responsibility for losses that
might result from the execution of the proposals or recommendations
presented. EEB is not responsible for any content that may originate with third
parties. EEB may have provided, or might provide in the future, information that
is inconsistent with the information herein presented.
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Table of contents
1. EEB Overview and Key Updates – 1Q 2014
2. Expansion Projects Review
3. TGI 31.92% stake acquisition
4. Financial Review – 1Q 2014
5. Questions and Answers
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EEB Overview Transportation and distribution of energy with involvement in other areas
in the energy sector
25.0%
Electricity Transmission
Generation
40.0% 40.0% 1.8% 95.7%*
51.5% 2.5%
Distribution
51.5% 16.2% 51.0%* 82.0%*
Distribution
Transport
Gas Natural
75.0%*
68.1%*
99.9%*
* Controlled by EEB
15.6%
60.0%*
100%*
Services
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Focus on natural monopolies
Growth in controlled subsidiaries
Sound regulatory framework
Ample access to capital markets
100%*
EEB Movilidad
Key Updates
Acquisition of 57.6% of ISAGEN
• On February 27th 2014, the BoD confirmed its interest of participating in the bid to acquire 57.6% of Isagen shares
offered by the National Government
• EEB participation will seek to acquire control.
• EEB is waiting SIC’s decision to the appealing made on February 21.
• On March 27th EEB has prequalified to participate in the process
• The process is standstill pending on the high courts decision.
Dividends Decreed:
• On March 27th, EEB Shareholders’ Meeting approved payment of dividends of COP 590,530 million (USD 300.4 mm),
equivalent to 70% of profits generated during 2013.
• COP 64.32 per share, three installments: May 27th / June 26th / November 27th
Contugas inagurated the ICA regional pipeline
• Before the deadline, Contugas, jointly with the Ministry of Energy and Mines and Enbridge Technology Inc., an
international inspector, on April 30th, signed the final act of testing. This is a requirement for the Commercial Operation
set forth in concession contract, which certifies that the infrastructure has met the applicable standards.
• At the closing of March 2014, the company has over 14,700 customers presently receiving gas (Of the 26,158 total
sales in households).
• At the end of February 2014, the first large user of natural gas was enabled (Textiles del Valle). Subsequently, a GNV
station has been enabled as well as a Paper mill. At the beginning of 2Q 2014, some fishing companies and 2
steelmakers will be connected and serviced (among other large customers).
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Sogamoso - Norte - Nueva Esperanza Project
• EEB was awarded the Sogamoso-Norte-Nueva Esperanza transmission project whose revenues have a NPV
amounting USD 171 mm.
• The project includes the construction, operation and maintenance of the Norte substation (500kW) and the
transmission line Sogamoso-Norte-Nueva Esperanza (500 kv).
• This project is part of the Expansion Plan UPME 2013-2027
Acquisition of 31.92% of TGI
On December 11th 2013, EEB’s Board of Directors decided to exercise EEB’s Right of First Offer (ROFO) under the
Shareholder’s Agreement for the acquisition of a 31.92% stake in TGI, after the end of the lock-up period (3 years).
Offer was submitted on March 25th 2014
The offer, for a value of USD 880 million, was accepted by The Rohatyn Group (formerly CVCI) on April 3rd 2014,
This transaction, which is part of EEB’s USD 7.5 billion 2013-2017 investment plan will generate positive value for EEB´s
shareholders.
Key Updates
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2. Expansion Projects Review
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Guatemala
Expansion Projects Controlled Subsidiaries
Natural Gas Transportation
• CAPEX Exec. 1T2014: USD 8.75 mm
• Construction: Sabana Station: 48.8%
• Planification: Regional Syst. (4Q 14)
Electricity Transmission
• CAPEX : Executed 2014: USD 8.88
mm
• Total Investment: USD 308 mm
Natural Gas Distribution
• CAPEX Exec. 1T2014: USD 16.24
mm
• Total investment: USD 500 mm
• By the end of 2016 it is expected to
have 455,000 customers connected.
Natural Gas Transportation and
Distribution
• CAPEX: Executed 2014: USD 25.02
mm
• Total inverstmet: USD 358 mm
• Under construction:1Q 14: 92%.
• Full operation 2Q 14
Electricity Transmission
• CAPEX Exec. 1T2014: USD 11.02
mm
• Total Investment: USD 376 mm
• Started operation (partially): 4Q13
• Under construction:1Q 14: 67%.
• Delivered 2015
Engineering and Services
• CAPEX: Executed 2014: USD 0.51
mm
• Sugarmills Investment: USD 44 mm
• Under construction IQ 14: 34%
• Full operation 2014-15
Colombia
Perú
• Under Construction 1Q 14:
• Armenia – 54.9%
• Tesalia – 77%
• Chivor II Norte – 22%
• SVC Tunal – 38.5%
CAPEX Executed 1Q 2014
Controlled Subsidiaries
USD 74.49 Millions
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Expansion Projects Non Controlled Subsidiaries
Electricity Generation
• CAPEX Exec. 2014: USD 102.12 mm
• Quimbo Project (400 MW)
• Total investment: USD 1,093 mm
• Exec 2013: USD 279 mm
• Accum. Exec: USD 564.8mm
• Execution 1Q 14: 64.8%
Electricity Distribution
• CAPEX Exec. 2014: USD 20.5
mm
• Projects executed:
• New and existing demand
• Quality service and continuity
• Control operational risk
Electricity Transmission
• CAPEX Exec. 2014: USD 24.27
mm
• Extensions and new concessions;
2013- 2014
Electricity Transmission
• CAPEX Exec 2014: USD 14.38
mm
• Extensions and new concessions;
2013 - 2014
CAPEX Executed 2014
Non Controlled Subsidiaries
USD 176.9 Millions
Natural Gas Transportation and
Distribution
• CAPEX Exec. 2014: USD 13.98
mm
• Total investment: USD 137 mm
• Liquefaction Plant: Invest. USD
34 mm
• Pipeline Mamonal – Sincelejo:
USD 70 mm
Colombia
Perú
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Natural Gas Distribution
• CAPEX Exec. 2014: USD 1.66 mm
3. TGI’s Stake Acquisition
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Acquisition of 31.92% of TGI
* Bank charges and reserve funds are not included. ** Transaction payment will be done to IELAH Luxembourg
SPV 1/ Trust
USD 264* MM
Equity
EEB S.A. ESP
IELAH Inversiones en Energía
Latinoamérica Holding S.L.
USD 880 MM**
TGI S.A. ESP
SPV 2
TGI
Local Short-term Debt/
Cash on Balance
USD 264* MM
Banks 2019
USD 616* MM
Debt
Colombia
Spain
Phase 1
Phase 3 Colombia
IELAH Inversiones en Energía Latinoamérica
Holding S.L.
SPV 1
SPV 2
Spain Phase 2
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Total offer amount: USD 880 million
5.8
5.1 5.1
4.2 3.6
2.5
3.9
2008 2009 2010 2011 2012 2013 2014 P
6.5
5.6 5.4 4.9
4.2
3.5
5.1
2008 2009 2010 2011 2012 2013 2014 P
Source: Company information. Note: Ratios calculated in local currency (1) Total Debt Includes MM USD 616 associated to EEB Financed Acquisition
Total Debt(1) / EBITDA (x)
Key Updates –Credit Metrics Impacts
Total Net Debt(1) / EBITDA (x)
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Ratings Threshold: 4.0: 1.0
Cash available
will allow to
reduce total debt
Moody’s Fitch Ratings S&P
EEB Affirmed Baa3 / Outlook Stable
Affirmed BBB- / Outlook Stable
Affirmed BBB- / Outlook Stable
TGI Affirmed Baa3 / Outlook Stable
Affirmed BBB- / Outlook Stable
Affirmed BBB- / Outlook Stable
Following EEB's announcement to increase its majority stake on TGI, the actions taken by the rating
agencies are as follows:
Banks offers for funding the transaction were already received this week.
4. Financial Review – 1Q 2014
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Consistent Financial Performance Consolidated Results - Operational
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Operating Revenues (+20.6%): Growth is
explained mainly by increase of revenues in natural
gas business:
Calidda: new connections (Residential and
Commercial) and higher volume distributed
TGI: tariff scheme in force and Cusiana Phase II
Operating Profit (+26.8%): Operational costs and expenses showed a
moderate increase due to:
TGI operational costs and expenses decreased by 12.1%, mainly due to a
decrease in personnel services and general services and fuel gas costs.
Contugas and Cálidda show increases mainly in costs related to fees,
maintenance activities in the gas network and the cost of internal
installations by third parties
1Q 14 1Q 13 $ % 1Q 14 1Q 13 $ %
Operating revenue 542,254 449,468 92,786 20.6% 275.9 245.3 30.6 12.5%
Cost of sales (271,649) (229,143) (42,506) 18.5% (138.2) (125.1) (13.1) 10.5%
Gross profit 270,605 220,325 50,280 22.8% 137.7 120.3 17.4 14.5%
Operating expenses (53,798) (49,399) (4,399) 8.9% (27.4) (27.0) (0.4) 1.5%
Operating profit 216,807 170,926 45,881 26.8% 110.3 93.3 17.0 18.2%
Operating margin 40.0% 38.0% 40.0% 38.0%
COP Million Variance USD Million Variance
5% 6%
13% 16%
43% 46%
39%
33%
2014 IQ 2013 IQ
Operating Revenue by Segment COP Million
449,468
542,254
5% 8% 4% 6%
78% 77%
13%
9%
2014 IQ 2013 IQ
Operating Profit by Segment COP Million
170,926
216,807
At the end of 1Q 2014 operational Profits from controlled subsidiaries participate with 51% of the total adjusted EBITDA,
compared to 15% of participation in 2006. Dividends from non-controlled companies participates with the remaining 49%
EBITDA Evolution
Consolidated Results
Normalized Dividends: *2010 excludes dividends declared based on an early close of Gas Natural’s, Emgesa’s and
Codensa’s financial statements. These figures are included in 2011, when such dividends would normally have been
declared.** Anticipated dividends declared by Codensa on first half 2011, were included in 2012.
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Consistent Financial Performance Consolidated Results – Non Operational
Dividends: Increase of COP 47,715 million in terms of decreed
dividends in favor of EEB, particularly those from Emgesa,
Codensa and Gas Natural.
Foreign Exchange Account: The revaluation of COP had a
positive impact on the foreign exchange account, as a result of
updating financial obligations of the Group denominated in USD,
which is only for accounting purposes and does not correspond to
cash expenditures.
Non Operating Expenses:
Financial Expenses: Increase in COP 10,098 million, due to
increase in financial debt in 2013
Calidda: USD 320 mm bond
Contugas: USD 280 mm syndicated loan (USD 65 mm net)
EEB: USD 139 mm, reopening bond 2021.
Net Income : Increase in 11.2%
* EMSA, ISA, ISAGEN, REP-CTM, Others
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1Q 14 1Q 13 $ % 1Q 14 1Q 13 $ %
Operating profit 542,254 449,468 92,786 20.6% 275.9 245.3 30.6 12.5%
Dividends 832,806 785,091 47,715 6.1% 423.8 428.5 (4.7) -1.1%
Consolidated Adjusted EBITDA LTM 1,880,913 1,604,916 275,997 17.2% 957.1 876.0 81.1 9.3%
Non-operating expenses 714,096 630,851 83,245 13.2% 363.3 344.3 19.0 5.5%
Net income before taxes and minority interest 930,903 801,777 129,126 16.1% 473.7 437.6 36.1 8.2%
Minority interest (28,541) (13,782) (14,759) 107.1% (14.5) (7.5) (7.0) 93.3%
Provision for income tax (49,045) (20,751) (28,294) 136.4% (25.0) (11.3) (13.7) 121.2%
Net income 853,317 767,244 86,073 11.2% 434.2 418.8 15.4 3.7%
COP Million Variance USD Million Variance
Consolidated Current Debt Maturity Profile – USD MM
Debt Indicators
Consolidated Results
Indebtedness in USD increased as a result of new debt issuance in 2013.
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Consolidated Debt Composition– USD MM
EEB Share Performance 1Q 2014
Ticker EEB:CB
As at May 13th, 2014 EEB’ market capitalization was USD 7.7 Billion
Trading volume tripled after the Equity Offering Nov 2011.
The stock is part of COLCAP, COL20, and COLEQTY
Average Target Price: COP 1,711 (USD 0.87)
Dividend Payout Ratio 2013: 70% Avg 2008 - 2013: 79%
Dividend Yield 2013: 3.5% Avg 2008 - 2013: 3.3%
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5. Questions and Answers
Conference Dial-In Numbers: Conference ID 45689144
Participant Toll-Free Dial-In Number: +1 (877) 359-9508 Participant International Dial-In Number: +1 (224) 357-2393
Participant ITFS Dial-In Numbers:
Chile: 12300206168 Colombia: 018005180165 Perú: 080052957 United Kingdom: 08000288438 19
Investor Relations
For more information about Grupo Energía de Bogotá contact our Investor Relations team:
http://www.eeb.com.co
http://www.grupoenergiadebogota.com/en/investors
Fabian Sánchez Aldana Investor Relations Advisor GEB
+57 (1) 3268000 – ext 1827 [email protected]
Antonio Angarita Investor Relations Officer GEB
+57 (1) 3268000 - ext 1546 [email protected]
Rafael Andres Salamanca Investor Relations Advisor GEB
+57 (1) 3268000 – ext 1675 [email protected]
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